Southern power crisis aggravating SA’s pernicious economy

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  • Severe power outages directly affecting production
  • Moody’s cuts South Africa’s 2020 economic growth to 0.7% from a previous forecast of 1.5%
  • Sub-Sahara has the lowest electricity generation capacity which results in forgone economic opportunity

Harare – Neighbouring South Africa just like Zimbabwe, has had to endure the severity of power blackouts as the state-owned power utility Eskom that generates about 95% of the nation’s electricity is now incapacitated to feed its national grid.  

Consequently, production fell the most in five and a half years in December, manufacturing declining by 6% and more than 30% of SA mining projects are likely to be terminated prematurely due to additional power cuts if solutions are not found within the year.

Miners and manufacturers cannot function efficiently without power; hence were forced to shut down operations or minimise their operations which inevitably affected output.

The dire power cuts have hurt South Africa’s economy by putting pressure on commercial and industrial players that rely heavily on stable supply.

According to the Council for Scientific and Industrial Research Company (CSIR) load shedding is expected to continue for the next two to three years as the country will sit with a supply gap until 2022.

Ratings agency Moody’s has cut its 2020 economic growth forecast for South Africa to 0.7% from a September forecast of 1.5%, saying the economy remains stuck in low gear due to lacklustre domestic private-sector demand.

Moody’s has also attributed the revised forecast to the “detrimental impact of widespread power outages on the manufacturing and mining activity,”

This puts the mining sector at a very great risk. South Africa is number 5 in gold but remains bountiful of mineral riches. It is the world’s largest producer of chrome, manganese, platinum, vanadium and vermiculite.

The Sub Sahara African region currently has the lowest electricity generation capacity and experiences the most acute forms of energy poverty in the world.

The results are deprivation, pollution, environmental damage, drudgery, and forgone economic opportunity. Compounding these challenges is Africa’s vulnerability to climate change, which means that traditional pathways to increasing energy supply, based on the burning of fossil fuels, will become increasingly unviable.

The fossil fuel path will exacerbate climate change. The renewable energy path will present challenges related to capacity and intermittency. The energy system must then be designed to evolve and take advantage of the many benefits of distributed clean energy. Yet renewables like solar and wind, are only available intermittently.

Aggravating climate change will only worsen the El Nino induced drought that has swept across Southern Africa particularly South Africa, Zimbabwe, Zambia and Angola.

The drought is negatively affecting food security in the Southern African region and is currently classified as a level 2 Red Class Event.

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